Document: TVA?s letter

POLL: Do you use TVA recreational areas?

When Larry Steidle became the owner and operator of Blue Springs Marina 30 years ago, the docks had 60 homemade boat slips.

Slowly, he has built the marina up until it has slips for 370 boats, and it's 80 percent full.

"I own the land," Steidle said. "But TVA takes possession of the water and the land under the water up to a certain water level, so they own to about halfway up my parking lot.

"Now with this recent land and shoreline policy change, they want a percentage of your gross income or your base fee," Steidle said. "I doubt if my bills can withstand that."

Steidle's marina is one of about 450 riverbank businesses and properties expected to be affected by a change the Tennessee Valley Authority is rolling out this year after about five years of study and negotiation.

Over the years, many commercial-use fees have been very low -- varying from $400 to $1,200 a year for multiacre recreational areas, according to TVA officials.

"We decided we needed a consistent policy," said James Adams, TVA's manager for land and shorelines.

"These folks are in private business making money off of public land," said Bill Sitton, TVA's land and shoreline communications consultant.

TVA, a federally owned and ratepayer-financed utility, purchased and obtained thousands of acres of riverside land in the 1930s and 1940s to create flood control and power generating reservoirs.

In the past decade, TVA has met public resistance to selling or swapping its lakeshore land to developers and adopted a policy not to sell more.

But TVA still is looking at raising the lease and use fees at most of the recreational campgrounds and marinas along the publicly owned shorelines of its 46 reservoirs across seven states.

The new policy, to be implemented in January 2013, looks at the recreational areas with a formulaic eye toward market-value rents or leases, or a percent of commercial revenues. The overall new contract sets out 4 percent of revenues, Adams said.

Opposition voiced

BY THE NUMBERS

450: The number of commercial lease agreements TVA has on recreational properties in its seven state region

46: The number reservoirs involved in TVA's commercial leases or easements

71: The number of commercial lease agreements on Watts Bar, Chickamauga, Nickajack and Guntersville lakes.

Source: TVA

Knowing that profits and losses tend to trickle down, Rhea County Mayor George Thacker and his neighbor Meigs County Executive Garland Lankford took their concerns to the TVA board of directors last week.

"You're killing us," Thacker said of new fees charged to commercial campgrounds and marinas. "This is public land, and these are mom and pop operations. We're just asking for a moratorium."

Thacker likened the fee to a new tax, something TVA is quick say is incorrect. And he asked the board for a moratorium. The board thanked the speakers, but took no action.

Lankford said Tuesday that both counties depend on tourism money from the scores of shoreline commercial businesses along Watts Bar Lake -- from marinas to restaurants to bait shops. And in this economy, passing on the cost to consumers will just drive that business down more.

"My problem is the combination of all of this. I'm seeing deterioration of our water from Oak Ridge and now the [Kingston] ash spill washing down into Meigs and Rhea counties. Put on top of that, now we're seeing lots of campgrounds being closed down, and Watts Bar Resort being bulldozed -- well, it's hard to compete with your revenue bears gone," Lankford said.

The 185-acre resort, built in 1939, had a once-busy summer restaurant, a small marina, 40 cabins and a pool. Marina slips often had to be booked weeks in advance.

Steidle agreed with Lankford that pollution problems and the economy contributed to lake tourism downturns, noting that TVA ash recovery contractors worked at his marina for weeks.

But he said the new fees were "the final straw" that now is driving many shoestring recreation entrepreneurs to close their doors.

"Out of 20 something marinas on this lake, there's only four left," Steidle said.

Big corporate marinas and recreation businesses could probably withstand the increases with little trouble, Steidle said. "But we did this little by little. And some of us have loans that were taken based on revenues expected with the old rates. I even had a contract saying I was grandfathered in. TVA just said, 'Well, we changed our policy.'"

Support voiced

A chain and "No Trespassing" sign block the road leading to the old marina section of what was once Watts Bar Marina & Resort in Rhea County, Tenn. The land formerly occupied by the marina is owned by TVA.

Bob McMahan, vice president and chief operating officer of Erwin Marine, which operates Chickamauga Marina, said the new rates are fair.

"Really some of those old licenses [lease rates] were really low -- I mean three figures a year," he said.

"If people are complaining, they're taking exception to what it used to be. If they're saying this will put them out of business, then they've got bigger problems," said McMahan.

McMahan and another large marina operator in Knoxville, Mitch Jones, used the Tennessee Marina Association to persuade TVA to lower the utility's original 2005 planned increases.

"The fees they first wanted to charge were just too high," said Jones, who was president of the association during the time of the negotiations.

"We hired a legal firm, and it was a five-year process," he said. "But we got them to move it to where it didn't put folks out of business."

McMahan also praised TVA as one of the forces that got behind the Clean Water Act, something he said keeps the river and lakes safe for recreation.

Adams said TVA ordered the demolition of Watts Bar Resort after it had been idle for some time and its operators violated the terms of their lease by not maintaining the 185-acre property.

He said quite a few of the commercial easements are to counties and municipalities, and TVA usually grants those free of charge. Chester Frost Park in Hamilton County is an example.

Adams said the utility now makes between $500,000 and $600,000 from its commercial shoreline leases.

He said it's too early to know what the utility will see in revenue until all the recreation contracts have been signed.

Steidle said the figure he's seen in his own negotiations and research indicates TVA expects to make about $3.5 million a year from all the marinas in the seven-state region. That figure does not include campgrounds and other recreation businesses on TVA land and waters, he said.